Prudent growth drives steady rise in Mirvac stock

Shares in property developer and investor
Mirvac Group
have steadily risen 17 per cent in the year to date as the trust prudently moves through new ­commercial acquisitions and enjoys a rebound in apartment sales.

Last month, Standard & Poor’s ratings services said it had raised its long-term rating on Mirvac to BBB+ from BBB, and affirmed the short-term A-2 rating because of its belief Mirvac’s management remained committed to maintaining a “satisfactory" financial risk profile.

S&P said a downward rating pressure could occur if Mirvac started to undertake significant debt-funded acquisitions or materially diluted the quality of its asset base through the acquisition of lower quality assets.

So far, Mirvac has stayed well clear of this. In May, it raised $400 million through an institutional placement, underwritten by Macquarie Capital, used for the purchase of a $584 million portfolio of office towers across ­Australia from GE Real Estate.

The trust is looking to make a similar major transaction before Christmas.

While Mirvac’s expansion comes as a wave of players forge back into the market, analysts such as Morgan Stanley expect it will not attempt to out-compete
DEXUS Property Group
in its latest takeover offer for
Commonwealth Property Office Fund
. Mirvac, which is believed to have received backing from South Korea’s state pension fund, is also enjoying the benefits of a rebound in NSW’s apartment market.